9911796707
TMI Blog2024 (7) TMI 1328X X X X Extracts X X X X X X X X Extracts X X X X ..... dition of Rs.6,61,00,000/- made by the AO solely based on the statement recorded by the employees from whom the search team has not impounded any books of account, documents, money, bullions, jewellery or any incriminating documents. 5. Ld. CIT (A) has erred in confirming the addition of Rs.6,61,00,000/- made by the AO on the basis of some dumb loose sheets said to have been found in the searched premises during the course of search without appreciating the fact the alleged dumb loose sheets cannot constitute books of account. 6. Ld. CIT (A) has erred in confirming the addition of Rs.6,61,00,000/- made by the AO on the basis of dumb loose sheets which were not in the nature of incriminating documents 7. Ld. CIT (A) has erred in confirming the addition of Rs.6,61,00,000/- made by the AO without appreciating the fact that the alleged contention of handing over amount of Rs.6,61,00,000/- to the management was not supported by any conclusive evidence as has been held by the CIT (A). 8. The Commissioner of Income Tax (Appeals) erred in not considering Form 9A filed by the appellant Trust. 2. Facts of the case are that during the course of search proceedings u/s 132 of IT Act 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the search proceeding, Mr. Dilip Kumar confirmed that loose excel sheets were maintained by him which were found and seized. Mr. Dilip has written fee receipt transactions on the same sheet in his own handwriting. 2.5 The AO observed that Mr. Dilip Kumar maintained the record of the due fee of the students pursuing their study in medical and dental courses and for those who have gotten admission in management and NRI quota in the college. That the amounts received through banking channel were scribbled down by Mr. Dilip Kumar in pen in front of the particular row which contained the details of the student and there were encircling made in pencil also in some cases. 2.6 During the course of search proceedings, a sworn statement dated 20.02.2021 of Mr. Dilip Kumar was recorded u/ 132 (4) of the Act, in which he AX stated that Mr. Vishwanath Shetty had collected some part of their fee directly and in such cases, he recorded 'pd to V.S' in pencil. Mr. Dilip Kumar categorically admitted that 'Pd to V.S' means cash paid to Mr. Vishwanath Shetty. 2.7 In subsequent statements, he again confirmed that while calling the students to remind them to pay their due fee, he came ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gents through whom they got admission and claimed that he had not received the said cash. 2.13 The AO observed that the aforesaid claims were contradictory, and that the role of agents were limited to introducing students to the college and carrying out all the documentation and procedure for admission, and they received commission for the same. The agent had no role post the admission of the students. Therefore, the AO asserted it is highly unlikely that the agents would have received the cash from the students as claimed by Mr. Vishwanath Shetty and no evidence for the claims made were found during the search. Mr. Vishwanath Shetty also claimed that the handwritten figures in the seized materials were nothing but discounts given to students. The AO countered these arguments with evidences in the assessment order and discredited the claim. 2.14 Mr. A.J Shetty is the President of the assessee Trust. He along with his son Mr. Prashanth Shetty looked after the overall functioning of the colleges registered under the Trust. All the decisions were taken by Mr. A. J Shetty regarding the financial matters of trust and he was the authorized signatory for expenditure related payment of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stance and deposition on oath. 2.19 The AO pointed out that even there were contradictions in the statements dated 29.09.2021 and 17.08.2021 deposed by Mr. Vishwanath Shetty and Mr. Dilip Kumar and he specified certain instances to prove the same. Further, the AO stated that the retracting statements given were nothing but an afterthought to cover up the cash received by them from the students. The AO referred to and relied upon many judicial pronouncements to support his action that the statements recorded u/s 132 (4) and 131 of the Act have great evidentiary value and cannot be denied in a summary manner. Hence, the unaccounted cash receipts of Rs.6,61,00,000/- was treated as income of the assessee. 2.20 Further, it is seen from the assessment order that the AO claimed that incriminating materials were found at the search premises with respect to seat blocking and cancellation scam by the assessee. The AO explained the concept of "Stray Vacancies", which were nothing but unallotted seats which are lying vacant after the end of MOP-UP round of counseling. In the case of the assessee, the total seats filled under management quota was 40, whereas the total seats available under ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... search, the AO established that unaccounted cash receipts from students aggregated to Rs. 6,61,00,000/- during F.Y 2020-21 and these receipts were not accounted by the assessee Trust. 2.27 Against this assessee went in appeal before ld. CIT (A) who has confirmed the order of ld. AO with regard to addition of Rs. 6,61,00,000/- and given a partial relief. Once again, the assessee is in appeal before us. 3. First, ground Nos.1 to 7 are with regard to addition of Rs.6.61 Crores on the basis of statement recorded u/s 132 (4) of the Act supported by unsubstantiated documents found during the course of search. 3.1 The ld. A.R. submitted that the Learned CIT (A) erred by acknowledging the addition of Rs. 6.61 crores made by the learned AO solely on the basis of sworn statement and loose sheets found in the possession of employees of the trust, which is not sustainable under law. The Learned CIT (A) also erred in upholding the decision of Ld. AO to tax Rs. 6.61 crores by treating the same as unaccounted cash receipts from students without considering the facts and circumstances of the case. He erred by accepting the addition of Rs. 6.61 crores without considering the fact that Mr. Dilip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,000. When he was in ICU etc how can he take cash. But initially on 20-02-2021 in his statement on oath said to be taken under section 132 (4) of the act, he stated he has received cash, Also stated in Page 58 of the assessment order (In his answer to question No 5), that Mr. Vishwanath Shetty was suffering from Covid-19 for the above period. No corroborative evidence in the seized material: in Para 13 of page 46 of the Assessment Order, the learned Assessing Officer has stated as follows: "There are cases where the search team could not find the other corroborating evidence like cheque leaves, the records maintained by the Mr. Dilip Kumar except the data maintained in loose sheet folder marked as A/AJIMS/02'." 3.3 Thus, he submitted that the learned Assessing Officer himself has stated that there is no corroborative evidence in most of the cases. Apart from that whatever seized (A/AJIMS/02) is loose sheets only. Further, in answer to question no 5 as reproduced in Page 58 of the assessment order, Vishwanath Shetty stated that "these are details which are convened and compelled to write on Paper in my own handwriting these are not cash transaction." 3.4 He submitted that in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 states that statements/admissions are not conclusive proof. He relied on various precedents which are kept on record. 4. The ld. D.R. submitted that the above issue based on the seized materials found during the search and the statements recorded from various persons at that time. The AO brought out the relevant evidences recovered from the search premises and analyzed these documents in detail along with the statements recorded from Mr. Dilip Kumar and Mr. Vishwanath Shetty. The seized materials, which are the primary evidences, are unambiguously clear in incriminating the appellant on the collection of unaccounted cash receipts from the students. 4.1 The seized documents clearly showed the name of the students, year of admission, batch, the course admitted to, total fees to be paid, dates, the amount paid in RTGS/other bank modes and other amounts with remarks as to whom they were paid to. The titles of these documents such as "old collection" made the purpose evident and the fact that the amounts recorded in the seized material with the title "old collection" were not recorded in the books of account clearly established that these were the unaccounted cash receipts. The stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as under: "A search and seizure operation was carried on at premises of the assessee' firm and others where in partner of the assessee disclosed certain undisclosed income. Accordingly, an addition was made to the income of the assessee. The Tribunal held that statement made by partner could be used as evidence and accordingly upheld the assessment order. The High Court dismissed appeal of the assessee. Held that it is not possible to say that this is a case of no evidence at all inasmuch as evidence in the form of the statement made by the assessee himself and other corroborative material are there on record." (ii) Judgement of Hon'ble High Court of Kerala in the case of CIT, Kozhikode Vs. O. Abdul Razak reported in (2013) 350 ITR 71 (Kerala) where held as follows: "IT: As self-serving retraction, without anything more cannot dispel statement made under oath under section 132 (4)". (iii) Judgement of Hon'ble High Court of Jharkhand in the case of Mahabir Prasad Rungta Vs. CIT, Ranchi reported in (2014) 266 CTR 175 (Kharkhan) (9.1.2014) wherein held as under: "IT: Where assessee has not adduced any rebuttal evidence to show that entries made in diary/loose sheets recove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is personal knowledge and therefore it was the burden of the assessee to prove that there was no suppression. Thirdly, the Tribunal has stated that there was no corroborative material to substantiate the contents of the loose papers found during the search. We are not impressed by this reason at all. The papers are not denied or disputed by the assessee. The CIT (Appeals) has found that the partners of the assessee firm had admitted to the practice of suppressing the profits. The papers themselves show two different rates, one higher and the other lower and on comparison with the sale bills it has been found that the sale bills show the lower rate and these findings have not been denied by the assessee. The Tribunal, therefore, erred in looking for some other corroboration to substantiate the contents of the loose papers, overlooking that the loose papers needed no further corroboration and the sale bills compared with the seized papers themselves corroborated the suppression of income. Fourthly, the Tribunal has relied on the observations of the CIT (Appeals) that no serious consideration can be given to the loose papers and has held that this shows that there is "nothing more in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he summary of the seized material relied for making above additions and corresponding statements from the various parties are as follows: SL.No. Name of Student Batch Affidavit or Sworn Statement given by Students/ Parents Reference in Assessment Order/ Paper book Seized Material Extract Reference in Paper book Page No. of the paper book No.3 1 BH Gyan 2019-20 Sworn Statement Page No 71 & 72 of Assessment order Page No 113 of Paper book No 1 01-02 2 Man Shetty Somanath Sudarshan 2019-20 Not able to contact Page No 114 of Paper book No 1 03 3 Utsav Shetty 2019-20 Sworn Statement from Mr. Uday Shetty (Father of Utsav Shetty) Page No 73 & 75 of Assessment order Page No 115-116 of Paper book No 1 04-05 4 Kunwar Rahihikmat 2017-18 Affidavit Assessee's Paper book No. 1 (Page No. 72 & 73). Page No 116 of Paper book No 1 06 5 Lekha Bhat 2017-18 Affidavit Assessee's Paper book No. 1 (Page No. 74). Page No 117 of Paper book No 1 07 6 Shashank D Raghavan 2017-18 Affidavit Assessee's Paper book No. 1 (Page No. 89) Page No 118 of Paper book No 1 08 7 Akshara Shetty 2018-19 Affidavit Assessee's Paper book No. 1 (Page No. 37 & 38) Page ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment order Page No 137-138 of Paper book No 1 32 27 Dr Aishwarya R 2019-20 Affidavit Assessee's Paper book No. 1 (Page No. 43 & 44). Page No 138-139 of Paper book No 2 33 28 Nikitha Nagesh 2019-20 Affidavit Assessee's Paper book No. 1 (Page No. 57 & 58). Page No 139-140 of Paper book No 1 34 29 Chidrawaj Yogendra Prakash 2019-20 Affidavit Assessee's Paper book No. 1 (Page No. 49 & 50). Page No 140 of Paper book No 1 35 30 Tejasvi Mathur 2019-20 Affidavit Assessee's Paper book No. 1 (Page No. 65). Page No 141 of Paper book No 1 36 31 Meenal Singh Rajput 2019-20 Affidavit Assessee's Paper book No. 1 (Page No. 75 & 76). Page No 141-142 of Paper book No 1 37 32 Arjun Venugopal 2019-20 Affidavit Assessee's Paper book No. 1 (Page No. 41 & 42). Page No 142-143 of Paper book No 1 38 33 Adya P Shenoy 2017-18 Affidavit Assessee's Paper book No. 1 (Page No. 31 & 32). Page No 143 of Paper book No 1 39 34 Rasmitha R 2017-18 Affidavit Assessee's Paper book No. 1 (Page No. 82 & 83). Page No 143-144 of Paper book No. 1 40 35 Saiyed Maria Imtiyaz 2017-18 Affidavit Assessee's Paper book No. 1 (Page No. 85 & 86 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sworn statement dated 14-03-2022 before assessing officer which is reproduced in Page No. 73 to 75 of the assessment order, he mentioned that Rs.15,00,000 was the discount given by the management and remaining fees Rs.10,00,000 was paid through RTGS. He has also clarified that management told not to disclose about discount to any employees, therefore he has worded cash instead of discount in his whatsapp message and he has said Rs, 15,00,000 paid in cash. Observation of AO in Para 11.4(1), 11.4(2) & 11.4(3) of Page No.38 to 40 of the assessment order Utsav Shetty has to pay Rs. 25 lakh each for 2020,2021 & 2022. For the year 2020, he has paid 10lakhs through NEFT on 01-02-2021. Mr. Dilip Kumar has mentioned in pencil that '15L pd to V.S' which he himself decoded as 'Rs. 15 lakhs are paid to Vishwanath Shetty in his statement. However, it may be noted that Mr. Dilip Kumar has not mentioned answer to question No. 14 of sworn statement dated 11-08-2021 that Rs.15,00,000 was paid to Vishwanath Shetty. His answer to question No. 14 of the sworn statement dated 11-08-2021 is as follows: "15 denotes amount was cleared to Vishwanath Shetty (V.S) by the students then I called them." It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat he has not paid any attention of whatsapp message of Uday Shetty, father of Utsav Shetty. However, it is to be noted that the amount of Rs.15 lakhs is not encircled in the seized material. Being so, it cannot be said that the said amount of Rs.15 lakhs has been paid. II SECOND ADDITION OF Rs. 4,57,00,000/- The above addition was made in respect of following students: Now we will examine the seized material related to each of this student. Kunwar Rahihikmat 9 Kunwar Rahihikmat 9825070452 (F) 8128101974 (M) 7984086102 (S) Our Remarks for above loose sheet SL No Name of the Students Batch Year Amount Remarks as per A/AJIMS/06 Page no Category-2 1 Kunwar Rahihikmat MBBS 2017-18 12,50,000 Fees due amount not mentioned. Payment details also not given so it cannot be considered as cash payment. 432 Noting as per A/AJIMS/02-Written by Vishwanath Shetty Date Name Dept Amount Page No 12-Nov kunwar Rahi Hikmat MBBS 17-18 12,50,000 8 Observation of AO: In loose sheet A/AJIMS/06 no amount is written where as Mr. Vishwanath Shetty has written Rs.12,50,000. There is mismatch no clarification/ details obtained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nbsp; Near to that Rs.15,00,000 is Written in pencil. This is also not encircled. In right side of the page in Pen written "Rs. 15L Neft Dt. 04-012021 XX 8141" In pencil, it is written "Pd to V.S". But it was not mentioned that it was paid in cash. 2 Rs. 15,00,000 was Due on 25-072020. 364 Encircled It in pen and right side in pen written "Rs. 15L Neft Dt. 04-01-2021 XX 8141", that means Rs.15,00,000 paid via banking channel. This is same neft details given here which is given in Page No. 362, which means this Rs. 15,00,000 is part of the above Rs.25,00,000 which is already been discussed. Notings as per A/AJIMS/02 Written by Vishwanath Shetty Date Name Dept Amount Page No 04-01-2021 Akshara Shetty MBBS18-19 10,00,000 16 In the Student's Affidavit is part of Assessee's Paper book No. 1 (Page No. 37 & 38), Ms. Akshara Shetty mentioned she has not paid any amount of fees in cash to the management. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Encircled Rs. 25,00,000 in pen and written Rs.12,50,000 over It in pen. Rs. 12,50,000 was encircled in pencil & also written Nil in pencil. Right side of the page In pencil written "Nil as per V. shetty 1002-2021". It was not mentioned that payment of Rs. 12,50,000 was made via banking channel. 2 Fees due amount for 2020 not mentioned. 360 Noting as per A/AJIMS/02-Written by Vishwanath Shetty Date Name Dept Amount Page No 19-12-2020 Kadeejath Shanifa MBBS18-19 12,50,000 16 In the Student's Affidavit is part of Assessee's Paper book No. 1 (Page No. 68 & 69), Ms. Kadeejath Shanifa Farveen mentioned she has not paid any amount of fees in cash to the management. Also in the said affidavit student has affirmed that said declaration in the affidavit is given by her voluntarily. Krishna Priya HK Remarks for above loose sheet SL. No. Name of the Students Batch Year Amount Point No Remarks as per A/AJIMS/06 Page no 7 Krishna Priya HK MBBS 2018-19 10,00,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Rs. 7,50,000 was not encircled. In right side of the page in Pen written "B 5L RTGS dt 06-02-2021 xx2744", That means Rs.5,00,000 paid via banking channel. This is same neft details given here which is given in Page No. 348, which means this Rs. 5,00,000 is part of the above Rs.12,50,000 which is already been discussed. This is same neft details given here which is given in Page No. 348, which means this Rs. 5,00,000 is part of the above Rs.12,50,000 which is already been discussed. Shiva Prakash P. Noting as per A/AJIMS/02-Written by Vishwanath Shetty Date Name Dept Amount Page No 7-Feb Shivaprakash P MBBS 18-19 12,50,000 8 Observation of AO in Para 8.5 of Page No. 18 of the assessment order Mr. Dilip Kumar has again confirmed that Mr. Vishwanath Shetty has collected cash of Rs. 7.5 lakhs and 5 lakhs from Mr. Shivaprakash and Ms. Suhasuman respectively in the FY 2020-21. Therefore he has recorded these events as "Rs.. 5L pd to v.s" and "Rs. 7 pd to v.s". In the Students Affid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aration in the affidavit is given by him voluntarily Suha Suman AV Noting as per A/AJIMS/06-Written by Dileep Remarks for above loose sheet SL. No. Name of the Students Batch Year Amount Point No Remarks as per A/AJIMS/06 Page no 10 Suha Suman AV MBBS 2018-19 5,00,000 1 Rs. 25,00,000 was due on 25-07-2020 348 In right side in Pen written "Rs. 999,940 RTGS dt 10-09-2020 xx 90024, B 10L RTGS dt 23-12-2020 xx 90023". Encircled Rs.25,00,000 in pen and written Rs. 15,00,060 over it in Pen. Encircled Rs. 15,00,060 in pen and written Rs.5,00,060 over it in pen. Also encircled Rs.5,00,060 in Pencil & Written Nil over it in pencil. In Right side of the page "Rs.5L Pd to V.S" Written in pencil.. It was not mentioned that it was paid in cash. 2 Fees due amount for 2020 not mentioned. 350 Noting as per A/AJIMS/02-Written by Vishwanath Shetty Date Name ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Nil as per V.S 02-02-2021" written in pencil. Rs 10,00,000 not encircled. Near this 10L pd nil is written in pencil. Banking channel payment Rs.10,00,000 only written. 2 Rs.10,00,000 was due on 25-07-2020 circled 262 Right side written in pen as "Rs 10L RTGS dt 06-01-2021xx2459", that means Rs.10,00,000 paid via banking channel Same neft details which is given in page no.258 was written here, which means this Rs. 10,00,000 is part of the above Rs.20,00,000 which is already been discussed. Noting as per A/AJIMS/02-Written by Vishwanath Shetty Date Name Dept Amount Page No 2-Dec Aishwarya Aravind MBBS 19-20 10,00,000 8 07-01-2021 Aishwarya Aravind MBBS 19-20 10,00,000 16 In the Student's Affidavit is part of Assessee's Paper book No. 1 (Page No. 35 & 36), Ms. Aishwarya Arvind mentioned she has not paid any amount of fees in cash to the management. Also, in the said affidavit student has affirmed that said declarati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s paid in cash. Hence the total fees due on 25-072020 was encircled. The Balance fees is not written here so it can be said that total fees is received through banking channel. Noting as per A/AJIMS/02-Written by Vishwanath Shetty Date Name Dept Amount Page No 20-01-2021 Nibina Nisar MBBS19-20 15,00,000 14 There is mismatch of amount in two loose sheets. In A/AJIMS/06 it is written as Rs. 12,00,000 in A/AJIMS/02 its written as Rs.15,00,000. Amount mismatch no details asked. In the Student's Affidavit is part of Assessee's Paper book No. 1 (Page No.78 & 79), Ms. Nibina Nisar mentioned she has not paid any amount of fees in cash to the management. Also, in the said affidavit student has affirmed that said declaration in the affidavit is given by her voluntarily Panchami Remarks for above loose sheet SLNo Name of the Students Batch Year Amount Remarks as per A/AJIMS/06 Page no 15 Panchami MBBS 2019-20 30,00,000 Rs. 15,00,000 was due on 25-12-2020 250 Encircled Rs. 15,00,000 in pen. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Circled Rs. 12,00,000 in pen In right side written in Pen "Neft Dt 29-09-2020 XX68768". Here neft amount not written. Hence the total fees due on 25-072020 was encircled. The balance amount is not written here so it can be said that total fees is received through banking channel. Noting as per A/AJIMS/02-Written by Vishwanath Shetty Date Name Dept Amount Page No 12-01-2021 Shreyas M.B MBBS19-20 20,00,000 14 In the loose sheets written by Mr. Dilip 12 lacs vs written 20 lacs not details asked. In the Student's Affidavit is part of Assessee's Paper book No. 1 (Page No.63 & 64), Ms. Shreya M B mentioned she has not paid any amount of fees in cash to the management. Also, in the said affidavit student has affirmed that said declaration in the affidavit is given by her voluntarily. Nithin HS Remarks for above loose sheet SL.No Name of the Students Batch Year Amount Point No Remarks as per A/AJIMS/06 Page no 18 Nithin HS PG 2018-19 20,00,000 1 Rs.20,00,000 was due on 20-05-20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dents Batch Year Amount Remarks as per A/AJIMS/06 Page no 20 Anantha Padmanabhan PG 2019-20 27,00,000 Rs. 13,00,000 was due on 20-05-2020. 76 Circled Rs. 13,00,000 In pencil and written Rs. 2,50,000 above it in pencil. Nowhere its mentioned by Dilip that "pd to v.s". Circled Rs. 2,50,000 in pencil and written Nil near that in pencil. Noting as per A/AJIMS/02-Written by Vishwanath Shetty Date Name Dept Amount Page No 30-Nov Dr Ananth Padmanabha MPG 19-20 14,00,000 8 23-12-2020 Dr Ananth Padmanabha MPG 19-20 2,50,000 16 04-01-2021 Dr Ananth Padmanabha MPG 19-20 5,00,000 16 07-01-2021 Dr Ananth Padmanabha MPG 19-20 5,50,000 16 It is not clear how Mr. Vishwanath Shetty made four entry in the loose sheet. The details was in loose sheet as against amount of Rs.13,00,000 was written by Mr. Dilip. In the Students Affidavit is part of Assessee's Paper book No. 1 (Page No. 47 & 48), Dr. Ananth Padmanabha mentioned he has not paid any amount of fees in cash to the management. Also in the said affidavit student has affirmed that said declaration in the af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rajesh Jain Orthopaedics MGT 5500000 20.05.2021 9743104610 9448540069 (F) 8904205020 (M) SL No Name of the Students Batch Year Amount Point No Remarks as per A/AJIMS/06 Page no 23 Rishab Jain PG 2019-20 35,00,000 Rs. 55,00,000 was due on 20-05-2021. Fees due for 2020 details not given here. Fees payment details not given. 64 Noting as per A/AJIMS/02-Written by Vishwanath Shetty Date Name Dept Amount Page No 28-Sep Dr Rishab Jain Ortho 19-20 35,00,000 10 In the Student's sworn statement dated 14-03-2022 is reproduced in Page No. 65 & 66 of the assessment order, Dr. Rishab Jain has mentioned Rs.35,00,000 was the discount given by the management and remaining fees paid through banking channels Dr Aishwarya R Noting as per A/AJIMS/06-Written by Dileep Remarks for above loose sheet SL. No Name of the Students Batch Year Amount Point No Remarks as per A/AJIMS/06 Page no 24 Aishwarya R PG 2019-20 13,50,000 1 Rs. 9,70,000 was due on 20-05-2020. 60 Circled Rs. 9,70,000 in pencil and written 3,20,000 over it. In right side in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s due on 20-092021. Fees due for 2020 details not given here. Fees payment details not given. 44 Noting as per A/AJIMS/02-Written by Vishwanath Shetty Date Name Dept Amount Page No 22-Oct Dr Yogendra Mch URO 19-20 15,00,000 12 In the Students Affidavit is part of Assessee's Paper book No. 1 (Page No. 49 & 50), Dr. Chidrawar Yogendra Prakash mentioned he has not paid any amount of fees in cash to the management. Also in the said affidavit student has affirmed that said declaration in the affidavit is given by him voluntarily. Tejasvi Mathur Noting as per A/AJIMS/06-Written by Dileep Dr. Tejasvi Mathur General Medicine MGT 5500000 20.05.2021 9458901741 9412998075 (F) 9937035775 (M) SL. No Name of the Students Batch Year Amount Point No Remarks as per A/AJIMS/06 Page no 27 Tejasvi Mathur PG 2019-20 8,00,000 Rs. 55,00,000 was due on 20-052021. Fees due for 2020 details not given here. Fees payment details not given. 76 Noting as per A/AJIMS/02-Written by Vishwanath Shetty Date Name Dept Amount Page No 14-Sep Dr Tejaswi Mathur GM 19-20 8,00,000 10 In the Student's Affidavit is part of Assessee's Paper book No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lows: Sr. No. Name of the students Batch Year Cash paid for their fee on year 2020 1. Adya P Shenoy MBBS 2017-18 12,50,000/- 2. Rasmitha R MBBS 2017-18 12,50,000/- 3. Saiyed Maria Imtiyaz MBBS 2017-18 12,50,000/- 4. Bhaskar Gorala PG 2017-18 8,00,000/- 5. Vangara Sushmita PG 2018-19 30,00,000/- 6. Mohd. Ashar EK PG 18-19 2,50,000/- 7. Kaushik Raju PG 2019-20 20,00,000/- 8. Shaludeen MBBS 19-20 23,00,000/- 9. Musin Farook MBBS 14-15 3,00,000/- TOTAL 1,23,50,000/- Now we will examine the seized material related to each of this student. Adya P Shenoy Remarks SL No Name of the Students Batch Year Amount Remarks as per A/AJIMS/06 1 Adya P Shenoy MBBS 2017-18 12,50,000 This Student details not found Noting as per A/AJIMS/02-Written by Vishwanath Shetty Date Name Dept Amount Page No 19-Sep Adya P Shenoy MBBS 17-18 12,50,000 10 In the Student's Affidavit is part of Assessee's Paper book No. 1 (Page No. 31 & 32), Ms. Adya P Shenoy mentioned she has not paid any amount of fees in cash to the management. Also, in the said affidavit student has affirmed that said declaration in the affidavit is given b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MS/06 5 Vangara Sushmita PG 2018-19 30,00,000 This Student details not found Noting as per A/AJIMS/02-Written by Vishwanath Shetty Date Name Dept Amount Page No 21-Oct Dr Vangara Sushmitha OBG 18-19 30,00,000 12 In the Student's Affidavit is part of Assessee's Paper book No. 1 (Page No. 66 & 67), Dr. Vangara Sushmitha mentioned she has not paid any amount of fees in cash to the management. Also, in the said affidavit student has affirmed that said declaration in the affidavit is given by her voluntarily. Mohd. Ashar EK Remarks SL.No Name of the Students Batch Year Amount Remarks as per A/AJIMS/06 6 Mohd. Ashar EK PG 2018-19 2,50,000 This Student details not found Noting as per A/AJIMS/02-Written by Vishwanath Shetty Date Name Dept Amount Page No 10-Sep Dr Mohd Ashar Ortho 18-19 2,50,000 10 In the Student's Affidavit is part of Assessee's Paper book No. 1 (Page No. 55 & 56), Dr. Mohd. Ashar mentioned he has not paid any amount of fees in cash to the management. Also, in the said affidavit student has affirmed that said declaration in the affidavit is given by him voluntarily. Kaushik Raju Noting as per A/AJIMS/06-Written by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Page No 13-11-2020 Musin Farook MBBS 14-15 3,00,000 8 In the Student's Affidavit is part of Assessee's Paper book No. 1 (Page No. 77), Mr. Musin Farook mentioned he has not paid any amount of fees in cash to the management. Also, in the said affidavit student has affirmed that said declaration in the affidavit is given by him voluntarily. Yaswanth Goud 24. Dr. Yaswanth Goud General Medicine 1500000 20.05.2020 9912139696, 984971687, 7702868818 24. Dr. Yaswanth Goud General Medicine 1500000 9912139696, 984971687, 7702868818 Remarks for above loose sheet SL No Name of the Students Batch Year Amount Point No Remarks as per A/AJIMS/06 Page no 1 Yaswanth Goud PG 18-19 27,00,000 1 Rs. 15,00,000 was due on 25-05-2020. 418 Circled Rs 15,00,000 in pencil and above written Nil in pencil. but amount not written. Details of payment in cash not written. In right side written '' time given upto 27-01-2021 in pencil'' 2 Fees due amount not mentioned. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fidavit is part of Assessee's Paper book No. 1 (Page No. 84), Dr. Roshan Shetty mentioned he has not paid any amount of fees in cash to the management. Also, in the said affidavit student has affirmed that said declaration in the affidavit is given by him voluntarily. Roshan Shetty Observation of AO in Para 14.2 and Para 14.3 of Page No.49 of the assessment order As per the data found in the seized material marked as A/AJIMS/02, it can be seen that the student paid the amount of Rs. 3 lakhs to Mr. Vishwanath Shetty. The student has paid 20 lakhs through RTGS and Mr. Dilip Kumar has maintained the pending fee of 17 lakh for the year. It means that the student has paid the amount of Rs. 3 lakhs in cash. 5.5 Further, the assessing officer issued notice to all the 43 parties who said to be paid unaccounted fees to the assessee. Out of the 43 students, following persons numbering 35 filed affidavit confirming that they have not paid any unaccounted fees to the assessee: 1 Kunwar Rahihikmat 2017-18 Affidavit Assessee's Paper book No. 1 (Page No. 72 & 73). Page No 116 of Paper book No 1 Paper book page no.06 2 Lekha Bhat 2017-18 Affidavit Assessee's Paper book No. 1 (Pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it Assessee's Paper book No. 1 (Page No. 43 & 44). Page No 138-139 of Paper book No 2 33 22 Nikitha Nagesh 2019-20 Affidavit Assessee's Paper book No. 1 (Page No. 57 & 58). Page No 139-140 of Paper book No 1 34 23 Chidrawaj Yogendra Prakash 2019-20 Affidavit Assessee's Paper book No. 1 (Page No. 49 & 50). Page No 140 of Paper book No 1 35 24 Tejasvi Mathur 2019-20 Affidavit Assessee's Paper book No. 1 (Page No. 65). Page No 141 of Paper book No 1 36 25 Meenal Singh Rajput 2019-20 Affidavit Assessee's Paper book No. 1 (Page No. 75 & 76). Page No 141-142 of Paper book No 1 37 26 Arjun Venugopal 2019-20 Affidavit Assessee's Paper book No. 1 (Page No. 41 & 42). Page No 142-143 of Paper book No 1 38 27 Adya P Shenoy 2017-18 Affidavit Assessee's Paper book No. 1 (Page No. 31 & 32). Page No 143 of Paper book No 1 39 28 Rasmitha R 2017-18 Affidavit Assessee's Paper book No. 1 (Page No. 82 & 83). Page No 143-144 of Paper book No 1 40 29 Saiyed Maria Imtiyaz 2017-18 Affidavit Assessee's Paper book No. 1 (Page No. 85 & 86). Page No 144 of Paper book No 1 41 30 Vangara Sushmita 2018-19 Affidavit Assessee's Paper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rded an opportunity to cross summons Mr. Dilip Kumar and Mr. Vishwanath Shetty. During the cross examinations, both Mr. Dilip Kumar and Mr. Vishwanath Shetty claimed that cash was not collected for admission process to MBBS and MD seats and instead, concession was given to students due to covid and others reasons by the management of the trust. It was crystal clear that Mr. Mr. Vishwanath Shetty and Mr. Dilip Kumar had turned hostile by changing their stance and deposition on oath. In our opinion, these two persons are not reliable witness to take support of their acceptance or rejection of collection of unaccounted fees. Their statements to be rejected as it is and no credence could be given to consider a true statement. 5.10 Further, it was brought to our notice that the details recorded in the dairy/loose slips which contain only the details for follow-up action to be made and thus, there was no conclusive evidence to suggest any unaccounted collection of fees. In our opinion, the addition cannot be made only on the basis of statement recorded u/s 132 (4) of the Act from the assessee's employees and the basis of unsubstantiated confession statement. Further, the Chairman Mr. Al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he parties and perused the record. 18. The primary grievance which arises in the present appeals pertains to whether the ITAT was right in deleting additions made under Section 68 of the Act by holding that no assessment could have been made on mere presumption of existence of incriminating material. 19. Undisputedly, during the period of search, no incriminating material appears to have been found. However, the Revenue proceeded to issue notice under Section 143(2) of the Act on the pretext of the statements of the Directors of the respondent-assessee companies recorded under Section 132 (4) of the Act and material seized from the search conducted on Jain group of companies. The assessment order was also passed under Section 143 (3) read with Section 153C of the Act making additions under Section 68 of the Act. 20. However, it is an undisputed fact that the statement recorded under Section 132 (4) of the Act has better evidentiary value but it is also a settled position of law that addition cannot be sustained merely on the basis of the statement. There has to be some material corroborating the content of the statements. 21. In the case of Kailashben Manharlal Chokshi v. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertainly constitute information and if such information is relatable to the evidence or material found during search, the same could certainly be used in evidence in any proceedings under the Act as expressly mandated by virtue of the Explanation to section 132 (4) of the Act. However, such statements on a stand alone basis without reference to any other material discovered during search and seizure operations would not empower the Assessing Officer to make a block assessment merely because any admission was made by the assessee during search operation. [Emphasis supplied] 23. In our opinion, the Act does not contemplate computing of undisclosed income solely on the basis of statements made during a search. However, these statements do constitute information, and if they relate to the evidence or material found during the search, they can be used in proceedings under the Act, as specified under Section 132 (4) of the Act. Nonetheless, such statements alone, without any other material discovered during the search which would corroborate said statements, do not grant the AO the authority to make an assessment. 24. Coming to the findings of the ITAT with respect to incriminating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The relevant portion of the said decision is extracted herein below: - (iv) Although section 153A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the Assessing Officer which can be related to the evidence found, it does not mean that the assessment "can be arbitrary or made without any relevance or nexus with the seized material. Obviously, an assessment has to be made under this section only on the basis of the seized material." [Emphasis supplied] 27. Recently, this Court, in the case of Saksham Commodities Limited v. Income Tax Officer, Ward 22(1), Delhi & Anr, while relying upon the decision of the Supreme Court in Abhisar Buildwell (supra) and this Court's decision in the case of CIT v. RRJ Securities Ltd., upheld the position of law that the AO would not be justified to assess income in case no incriminating material is found during the search. The relevant paragraph is reproduced herein below: - "54. In any case, Abhisar Buildwell, in our considered opinion, is a decision which conclusively lays to rest any doubt that could have been possibly h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the AO acted on a bona fide belief that the date of search has to be taken as the date of initiation of proceedings under Section 153C of the Act is concerned, it is apposite to refer to our decision in the case of CIT v. Ojjus Medicare (P) Ltd. This Court, in the said case, reiterated the already settled law that the date of initiation of assessment proceedings under Section 153C would be calculated from the date of handing over of the books of accounts, documents or assets seized to the jurisdictional AO of the non-searched person. The relevant paragraphs of the said decision are extracted herein below: - "K. SUMMARY OF CONCLUSIONS 119. We thus record our conclusions as follows: A. Prior to the insertion of Sections 153A, 153B and 153C, an assessment in respect of search cases was regulated by Chapter XIVB of the Act, comprising of Sections 158B to 158BI and which embodied the concept of a block assessment. A block assessment in search cases undertaken in terms of the provisions placed in Chapter XIVB was ordained to be undertaken simultaneously and parallelly to a regular assessment. Contrary to the scheme underlying Chapter XIVB, Sections 153A, 153B and 153C conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent or reassessment under Section 153C follows lines pari materia with Section 153A. D. The First Proviso to Section 153C introduces a legal fiction on the basis of which the commencement date for computation of the six year or the ten year block is deemed to be the date of receipt of books of accounts by the jurisdictional AO. The identification of the starting block for the purposes of computation of the six and the ten year period is governed by the First Proviso to Section 153C, which significantly shifts the reference point spoken of in Section 153A(1), while defining the point from which the period of the "relevant assessment year" is to be calculated, to the date of receipt of the books of accounts, documents or assets seized by the jurisdictional AO of the non-searched person. The shift of the relevant date in the case of a non-searched person being regulated by the First Proviso of Section 153C(1) is an issue which is no longer res integra and stands authoritatively settled by virtue of the decisions of this Court in SSP Aviation and RRJ Securities as well as the decision of the Supreme Court in Jasjit Singh. The aforesaid legal position also stood reiterated by the Supr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lock of six AYs immediately preceding the AY in which the satisfaction note was recorded by the AO of the respondent-assessee companies. 30. Further, in the case of M/s Design Infracon Pvt. Ltd., the ITAT held that there is violation of principles of natural justice as neither the statement of owner of Jain group of companies was provided to the said company, nor the opportunity of cross-examination was given. The ITAT in paragraph no. 23 has held as under: - "23. Now, coming to Design Infracon (P) Ltd., we find from the material available on record that there is brazen violation of principles of natural justice inasmuch as neither the statement of Mr. Jain recorded at the time of search nor his cross-examination was provided to the assessee by both the lower authorities despite specific and repeated requests made by the assessee in this regard. The Hon'ble Supreme Court in the case of M/s Andaman Timber Indusgies vs. CCE reported in 281 CTR 241 has held that not giving opportunity of cross-examination makes the entire proceedings invalid and nullity. The Co-ordinate Bench of the Tribunal in the case of Best City Infrastructure Ltd. (supra) has also held that not providing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorities entrusted with the power to make assessment of tax discharge quasi-judicial functions and they are bound to observe principles of natural justice in reaching their conclusions. It is true, as pointed out by this Court in Dhakeswari Cotton Mills Ltd. v. CIT [AIR 1955 SC 154 : (1955) 1 SCR 941 : (1955) 27 ITR 126] that a taxing officer "is not fettered by technical rules of evidence and pleadings, and that he is entitled to act on material which may not be accepted as evidence in a court of law", but that does not absolve him from the obligation to comply with the fundamental rules of justice which have come to be known in the jurisprudence of administrative law as principles of natural justice. It is, however, necessary to remember that the rules of natural justice are not a constant: they are not absolute and rigid rules having universal application. It was pointed out by this Court in Suresh Koshy George v. University of Kerala [AIR 1969 SC 198 : (1969) 1 SCR 317 : (1969) 1 SCJ 543] that "the rules of natural justice are not embodied rules" and in the same case this Court approved the following observations from the judgment of Tucker, L.J. in Russel v. Duke of Norfol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roup and the same is incriminating, vitiates the entire assessment proceedings. 36. Accordingly, we find no reason to intermeddle with the order of the ITAT which has rightly set aside the assessment order and deleted the additions made therein. 37. In view of the aforesaid and on the basis of the findings of fact arrived at before the authority, these appeals do not raise any substantial question of law and consequently, they stand dismissed. Pending applications, if any, are also disposed of." 5.13 Further, Hon'ble Supreme Court in the case of Common Cause (A registered Society) Vs. Union of India in Writ Petition (Civil) No.505 of 2015 dated 2.7.2018 [2017] 394 ITR 220 (SC) wherein considered and observed that the entries in the loose papers/sheets are not "books of accounts" and has no evidentiary value u/s 34 of the Indian Evidence Act. The Hon'ble Supreme Court dismissing the writ petition filed by Common Cause, a registered society, refused to give nod to investigate against the Sahara and Birla Groups in the alleged payoff scandal. The factual setting of the case are that, a search was conducted by the CBI in the premises of Birla Groups, as a result of which, certain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the authorities below. Shri Lanka Anil Kumar is an employee of M/s Navaratna Estates Ltd. A search u/s 132 was conducted in the residence of Shri Lanka Anil Kumar and certain sums were found in whatsapp messages in digits. When asked to explain, Shri Anil Kumar stated that the amounts were written in thousands represent lakhs and the total sum of Rs.1,05,00,000/-was taken as loan from the assessee in cash for his business purposes. When confronted with the assessee, he explained that the amounts mentioned in thousands are correct and the total amount would be in the range of Rs.5,000/- and Rs.10,000/- given to Shri Anil Kumar to meet the petty cash or miscellaneous expenses from M/s Navaratna Estates during registration of properties. A search u/s 132 was conducted in the case of Shri Lanka Anil Kumar as well as the assessee and the survey u/s 133A was conducted in the case of M/s Navaratna Estates. No evidence was found by the department either in the premises of the assessee or in the premises of M/s Navaratna Estates, having given loan to Sri Anil Kumar to the extent of Rs.1,05,00,000/-. In the search proceedings in the residence of Shri Anil Kumar also, no evidence with re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n for miscellaneous expenses. Mr.L. Anil Kumar also took similar stand in his assessment proceedings and said that the statement given during Search was under duress. The AO has not brought on record any evidences as to utility of such amount nor any other corroborative evidence to support the findings. Such evidences(Messages) without any supporting/corroborative along with admission of third person cannot be, basis for AO to come to conclusion and make addition in the assessment order. The low or the issue is laid down by the jurisdictional High Court, and followed by ITAT consistently in the following cases. * * * K. V. Lakshmi Savitri Devi Vs ACT 148 ITJ 517 (Hyd). * K. V. Lakshmi Savjtri Devi Vs ACIT ITTA 563 of 2017 (AP)(HC) * Jawahar Bhai Atmaram Hathiwala Vs ITO 128 ITJ 36 (Ahd) * DCIT Vs B. Vijaya Kumar ITA No.930 & 931 of 2009 (Hyd). * CIT Vs R. Nalini Devi ITTA 232 of 2013 (A. P) * CIT Vs P. V Kalyana Sundaran (2007) 294 ITR 49 * Venkata Rama Sai Developers Vs DCIT ITA 453/Vizag/2012. * P. Venkateshwar Rao Vs DCIT ITA 25/825/Vizag/2012. The ratio laid down is that solely on the basis evidences such as notings in loose sheets found with third parti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of these two witnesses and wanted to discredit their testimony for which purpose it wanted to avail the opportunity of cross-examination. That apart, the Adjudicating Authority simply relied upon the price-list as maintained at the depot to determine the price for the purpose of levy of excise duty. Whether the goods were, in fact, sold to the said dealers/witnesses at the price which is mentioned in the price-list itself could be the subject matter of cross-examination. Therefore, it was not for the Adjudicating Authority to presuppose as to what could be the subject matter of the cross-examination and make the remarks as mentioned above. (para 7) If the testimony of these two witnesses is discredited, there was no material with the Department on the basis of which it could justify its action, as the statement of the aforesaid two witnesses was the only basis of issuing the Show-Cause Notice. (para 8)" 5.17 The Delhi Tribunal in the case of Veena Gupta v. ACIT in ITA No. 5662/Del/2018 dated 27.11.2018 relying on the above judgment of Hon'ble Supreme Court in the case of Andaman Timber Industries (supra) quashed the assessment order on the reason of not providing cross-examina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 30,000 from out of the sum of Rs. 61,000, for income-tax and excess profits tax and business profits tax purposes, representing the value of the high denomination notes which were encashed." 5.19 The Hon'ble Calcutta High Court in the case of CIT v. Eastern Commercial Enterprises, 210 ITR 103 (Cal) held as follows:- "8. We have considered the contesting contentions of the parties. It is true that Shri Sukla has proved to be a shifty person as a witness. At the earlier stages, he claimed all his sales to be genuine but before the Assessing Officer in the case of the assessee, he disowned the sales specifically made to the assessee. This statement can at the worst show that Shri Sukla is not a trustworthy witness and little value can be attached to what he stated either in his affidavits or in his examination by the Assessing Officer. His conduct neutralises his value as a witness. A man indulging in double-speaking cannot be said by any means a truthful man at any stage and no court can decide on which occasion he was truthful. If Shri Sukla is neutralised as a witness what remains is the accounts, vouchers, challans, bank accounts, etc. But, we would observe here that whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aram v. CIT. Similarly, the requirement of cross-examination as the requirement of the rules of natural justice has been underlined by the Bombay High Court in Vasanji Ghela and Co. v. CST [1977] 40 STC 544. It is trite law that cross-examination is the sine qua non of due process of taking evidence and no adverse inference can be drawn against a party unless the party is put on notice of the case made out against him. He must be supplied the contents of all such evidence, both oral and documentary, so that he can prepare to meet the case against him. This necessarily also postulates that he should cross-examine the witness hostile to him. 10. In any case, we have nothing to rely upon to come to a decision this way or the other. The first thing is that which of the statements of Shri Sukla is correct, is anybody's guess. Therefore, it is necessary to delve out the truth from him and for that matter a cross-examination is necessary. Secondly, if the statement of Shri Sukla as a witness against the adverse party, the assessee, is relied upon as truthful, still remains the question of estimation of the profit. The assessee no doubt has given a comparative instance of gross profi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bank in evidence to prove the letter dated February 18, 1955, it could be taken into account as evidence. But before the income-tax authorities could rely upon it, they were bound to produce it before the assessee so that the assessee could controvert the statements contained in it by asking for an opportunity to cross-examine the manager of the bank with reference to the statements made by him. Nor was there any explanation regarding what happened when the manager appeared in obedience to the summons referred to in the letter dated March 9, 1957, and what statement he had made." 5.22 Further, third party statement cannot be relied upon without proper enquiry and providing proper cross-examination to the assessee. In CIT v. P.V. Kalyana Sundaram, 294 ITR 49 (SC), the Hon'ble Supreme Court observed that no reliance could be placed on loose sheets seized during the course of search and third party statements unless provided cross-examination. Collection of unaccounted fees is governed by Karnataka Institutions (Prohibition of Capitation Fees) Act, 1984 and there was no violation noticed by the State authorities and also Medical Council of India. In such circumstances, it is not poss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess of the same. Nothing was recorded in the orders of lower authorities that assessee has deviated from its objects for which approval u/s. 12A was granted and not applied its funds towards its objects. No evidence was brought out to show that the amount of unaccounted fees alleged to have been collected resulted in creation of any unaccounted assets by the trust or trustees or by any interested person. On this count also the addition cannot be sustained. 5.26 No assets commensurate with the alleged estimated collection of fees were found by the revenue authorities. The unbounded loose sheets having jottings are not speaking either by itself or in the company of others and not corroborated by enquiry, cannot be the basis of any inference that unaccounted fees was collected not entered in the accounts so as to sustain the addition. 5.27 Considering the facts of the case, we are of the opinion that the evidence collected by the authority is not sufficient to establish that the assessee has collected unaccounted fees for admission of students to various courses in the assessee's college. We are aware that entire evidence has to be appreciated in a wholesome manner and even where th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as found by the AO. The activities of the trust are genuine. There is no allegation by the lower authorities that activities of the trust are not genuine. Also there was no allegation that the activities of the trust are not carried on in accordance with the objects of the trust. There is no allegation that the assessee is not imparting education and it is an admitted fact that thousands of students are studying in the college and assessee has been carrying on educational activities imparting medical education. It fulfilled the requirement of imparting education which are not doubted or challenged by the authorities. Being so, the impugned collection of unaccounted fees cannot be determined and brought to tax. 5.28 Further, the Bangalore Bench of the Tribunal in the case of Venkatesha Education Society in ITA Nos.100 to 106/Bang/2012 and M.J. Balachander in ITA Nos.90 to 94/Bang/2012, order dated 21.12.2012 considered the case in similar circumstances where Mr. M.J. Balachander was collecting extra tuition fees without any authority or consent of the society and the conclusion of the CIT(Appeals) was that extra tuition fees was collected by Mr. Balachander on his own and society ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e KLE University", they are separate legal entities; (iv) that there is no violation of any of the conditions stipulated under the Income-tax Act, warranting for cancellation of registration of the society; (v) that the Tribunal on proper appreciation of the grounds urged by the society and the Revenue, has rightly restored the registration." 5.29 Further the Hyderabad Tribunal in the case of Prathima Educational Society, Hyderabad in ITA No.720/Hyd/2012 vide order dated 08.11.2013, wherein the Accountant Member is a party to the order, held that the evidence collected not speaking with regard to collection of cash of unaccounted fees, cannot be a reason to deny exemption u/s. 11 of the Act. The seized material on which reliance is placed by the revenue authorities is not conclusive evidence to sustain the addition. 5.30 Further the Hyderabad Bench of the Tribunal in the case of ACIT v. B. Srinivasa Rao, 159 TTJ 483 (Hyd) [wherein the AM herein was the author observed as under:- "8. As for the first reason put forth for cancellation of registration, viz., collection of capitation fee, it is submitted that in the course of search, excel sheets were found containing the names ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hearsay evidence and therefore, not relevant at all by itself. In such cases either authority who has fed the information must be identified or he must appear personally and testify before the Court about the source of information. Hence, in the absence of any such corroboration, the evidence remained a hearsay evidence, carrying no evidentiary value, in the absence of any corroboration. (g) At the time of seizure, the excel sheets were not authenticated either by the assessee or by the witnesses or by an authorized officer. This is an unsigned document and as such it loses its evidentiary value for want of authentication. In support of this proposition reliance is placed on the decision of Ahmedabad Bench of the Tribunal in the case of Sanskruti Township v. Department of IT [IT Appeal No. 1885 (Ahd.) of 2006, dated 23-9-2011] and Hyderabad Bench of the Tribunal in the case of Dy. CIT v. C. Krishna Yadav [2011] 12 taxmann.com 4/46 SOT 250 (Hyd.)(URO). (h) There is evidence in the seized record that the Department has typed some information by making use of assessee's computer and made part of the Panchnama. This fact was pointed out by the chairman of the assessee, Sri B. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not yield any further evidence. (k) It was brought to the notice of authorities that notings in the loose sheet remained uncorroborated till end as the same was not a speaking document and no supporting evidence by way of money receipt and other evidences was found. It was pointed out that the same was a dumb document and therefore not to form the basis of cancellation of registration under s. 12AA. With regard to evidentiary value of notings in the loose sheet, the appellant relies on the following decisions : (a) C. Krishna Yadav (supra); (b) Asstt. CIT v. Satyapal Wassan [2007] 295 ITR (AT) 352 (Jab.) ; (c) Asstt. CIT v. Dr. Kamla Prasad Singh [2010] 3 ITR (Trib) 533 (Pat.) ; (d) CIT v. Khazan Singh & Bros. [2008] 304 ITR 243/[2007] 164 Taxman 30 (Punj. & Har.) ; (e) CIT v. Girish Chaudhary [2008] 296 ITR 619/[2007] 163 Taxman 608 (Delhi) ; (f) Bansal Strips (P.) Ltd. v. Asstt. CIT [2006] 99 ITD 177 (Delhi) ; (g) CIT v. Maulikkumar K. Shah [2008] 307 ITR 137 (Guj.). (l) As regards the presumption under s. 132(4A), it was submitted that a loose sheet is not a book/document so as to raise the presumption. For this proposition, reliance was placed on the decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessee for cross-examination. The revenue authorities cannot draw inference on the basis of suspicion, conjectures and surmises. Suspicion, however strong, cannot take place the material in place of evidence of the AO. The AO should act in a judicial manner, proceed in a judicial spirit and come to the judicial conclusions. The AO is required to act fairly as a reasonable person, not arbitrarily and capriciously. The assessment u/s. 153A of the Act should have been supported by adequate material and it should stand on its own leg. The AO without examining the students / parents who have paid the unaccounted fees cannot come to the conclusion that the assessee has received unaccounted fees. The basis for donation is notebook / loose sheet. This notebook or loose sheets found during the course of search is only circumstantial evidence and not full proof evidence to sustain the addition. No addition can be made in the absence of any corroborative material. If it is circumstantial evidence in the form of loose sheets and notebook, it is not sufficient to come to the conclusion that there is conclusive evidence to hold that assessee has collected unaccounted fees. The notes in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39 ITD 183 (Delhi) (iii) S.P.Goyal vs DCIT (Mum) (TM) 82 ITD 85 (MUM) (iv) D.A.Patel vs DCIT 72 ITD 340 (Mum) (v) Amarjeet Singh Bakshi (HUF) vs ACIT 86 ITD 13 (Delhi) (TM) (vi) Nagarjuna Construction Co Ltd vs DCIT 23 Taxman.com 239 (vii) CIT vs C.L.Khatri 174 Taxman 652 (viii) T.S.Venkatesan vs ACIT 74 ITD 298 (ix) CIT vs Atam Valves Pvt Ltd 184 Taxman 6 (P&H) 5.34 In our opinion, there is no documentary evidence either to support the statements of employees or of the parents of the students; and 5.35 Further, the seized material are in the form of various loose sheets, scribblings, jottings and Excel sheets taken from the computer having no signature or authorization from the assessee's side. These are unsubstantiated documents and there is nothing to suggest any undisclosed assets of assessee found during the course of search. More so, search action not resulted in recovery of any undisclosed assets in the form of landed property, building, investments, money, bullion, jewellery or any kind of movable or immovable assets. 5.36 It is also noted that on cross examination of the employees, they have denied the receipt of the unaccounted fees. Further, out of 43 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome was earned by the assessee. .......................................................................................... .......................................................................................... 5.38 In our opinion, this circular is binding on the department and it is to be followed in true spirit. 5.39 Further, judgement in the case of CIT vs. S. Khader Khan Son (300 ITR 157), the Madras High Court held as follows: "The principles relating to section 133A of the Income Tax Act, 1961, are as follows: (i) an admission is extremely an important piece of evidence but it cannot be said that it is conclusive and it is open to the person who made the admission to show that it is incorrect and that the assessee should be given a proper opportunity to show that the books of accounts do not correctly disclose the correct state of facts; (ii) in contradistinction to the power under section 133A, section 132 (4) enables the authorized officer to examine a person on oath and any statement made by such person during such examination can also be used in evidence under the Income-tax Act. On the other hand, whatever statement is recorded under section 133A of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eard Counsels on both sides. Leave granted. Civil Appeal filed by the Department pertains to 2001-02. In view of the concurrent findings of the fact, this Civil Appeal is dismissed." 5.40 The above ratio laid down by the Madras High Court was confirmed by the Supreme Court. 5.41 From the foregoing discussion, the following principles could be culled out: i. An admission is extremely an important piece of evidence but it cannot be said that it is conclusive and it is open to the person who made the admission to show that it is incorrect and that the assessee should be given a proper opportunity to show that the books of accounts do correctly disclose the correct state of facts, vide decision of the Apex Court in Pullangode Rubber Produce Co. Ltd. v. State of Kerala [(1973) 91 I.T.R. 18]; ii. In contradistinction to the power under section 132 (4) of the Income-tax Act enables the authorized officer to examine a person on oath and any statement made by such person during such examination can also be used in evidence under the Income-tax Act if it is supported by corroborative materials. On the other hand, whatever statement is recorded under section 133A of the Income-tax Act i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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